South Africa’s economic growth prospects keep going from bad to worse.
The International Monetary Fund is the latest key institution to slash its growth forecast for Africa’s most-industrialized economy, which may have fallen into its second recession in as many years. It now expects the economy to expand by 0.7% in 2019, half of what it estimated in January, and similar to forecasts by the South African Reserve Bank and Bloomberg Economics.
The economy shrank the most in a decade in the first quarter of this year as the nation suffered the worst power outages since 2008.
The National Treasury, which forecast growth of 1.5% in the February budget, is expected to lower its prediction in the October mid-term budget. While the World Bank’s 1.1% estimate seems to be an outlier, it was published as part of its mid-year Global Economic Prospects outlook on the same day that Statistics South Africa released data showing a much bigger-than-expected contraction for the three months through March.
South Africa is stuck in its longest downward business cycle since 1945, data from the central bank showed in June.